LONDON, Aug 17 (Reuters) - Emerging stocks sailed higher for a second day and many currencies firmed on Thursday after diminishing U.S. interest rate prospects and political upheaval in Washington hurt the dollar while choppy commodity prices cast a shadow over some markets.

MSCI's emerging market stocks gained 0.5 percent to hit a one-week high. In Asia, heavyweights South Korea and Taiwan as well as Chinese mainland stocks rose around half a percent.

Manila's bourse advanced 0.3 percent after second quarter data from the Philippines showed the economy grew by a faster-than-expected 6.5 percent thanks to a strong industrial sector and construction boom.

Bourses in South Africa, Turkey and Russia as well as emerging Europeall added between 0.3-0.5 percent.

The gains came after the dollar hit a soft patch on Wednesday when minutes from the last U.S. Federal Reserve meeting showed a lengthy discussion about recent soft inflation readings, with some calling for a halt to rate hikes until it was clear the trend was transitory.

Adding to the pressure on the dollar was Trump's disbanding of two high-profile business advisory councils after eight executives quit in protest over his remarks about the weekend violence in Virginia, casting further doubt over how much he may be able to deliver for corporate America.

"Upcoming Fed balance sheet reduction concerns seem to have moved backstage for emerging markets overnight, given the Federal Reserve Open Market Committee minutes' doubts about future inflation, just making Fed guidance that much more difficult to read," said Simon Quijano-Evans, a strategist at Legal & General Investment Management.

Some currencies strengthened against the tepid dollar.

China's yuan chalked up some of the biggest gains, firming 0.3 percent and snapping a four-day losing streak.

Oil prices edged back above the $50 per barrel threshold following their 1 percent tumble on Wednesday, providing some support to Russia's rouble which firmed 0.2 percent.

But South Africa's rand was treading water, shedding initial gains as copper futures dipped into the red, retreating from the 32-month peak hit earlier in the day.

Meanwhile policymakers at Egypt's central bank are seen leaving key interest rates unchanged this month after hiking them unexpectedly by 200 basis points for the second time in a row in July to rein in roaring inflation.

Inflation had soared to 35 percent in July on the back of energy subsidy cuts agreed with the International Monetary Fund as a condition of its $12 billion three-year loan.

Egypt has lifted key interest rates by 7 percentage points since it floated the pound in November as part of a $12 billion International Monetary Fund programme aimed at boosting the economy.

For GRAPHIC on emerging market FX performance 2017, see tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see tmsnrt.rs/2dZbdP5

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